Molson Coors today reported it expects cash tax benefits of about $390 million this year as a result of its acquisition of MillerCoors.
The Colorado-based brewer completed the $12 billion acquisition of London-based SABMiller plc’s 58 percent stake in MillerCoors LLC in October. SABMiller and Molson Coors formed the MillerCoors joint venture in 2008 to combine their U.S. and Puerto Rico brewing operations.
Before the joint venture was formed, SABMiller’s U.S. operation, Miller Brewing, was based in Milwaukee. MillerCoors has about 1,200 employees and brews about 10 million barrels per year at its brewery in Milwaukee’s Miller Valley. It also brews Leinenkugel’s and specialty beer at its 10th Street Brewery in Milwaukee.
“With the completion of the MillerCoors transaction late last year and the changes we are making to align and enhance our organization, 2017 will be a transition year as we build a larger, stronger First Choice-focused company,” said Mark Hunter, president and chief executive officer of Molson Coors. “Consistent with this, our results today reflect increased investments in the building blocks that will drive top-line growth, cost savings, profit growth, cash generation, debt pay-down, and total shareholder returns in the years ahead.”
Molson Coors reported first quarter net income of $201.9 million, or 93 cents per diluted share, in the first quarter, down from $257.4 million in the first quarter of 2016. The company attributed the decrease to lower U.S. volume and higher brand amortization expense.
“Despite the softer start to this year, volume trends have improved since January and February, we are making great progress with our First Choice agenda in each of our businesses, and we are confident of delivering our full-year business plans,” Hunter said.
Revenue was $2.4 billion, down 0.5 percent year-over year. The company’s worldwide brand volume was 19.706 million hectoliters in the quarter, up 2.1 percent.
MillerCoors income from continuing operations before income tax was $315.6 million in the first quarter, up 3.4 percent year-over year. The increase was driven by lower special charges related to the closure of its Eden, N.C. brewery, lower MG&A expenses and net pricing growth.
